Hi Everyone,
Just wondering how people feel towards purchasing property in rural townships? Most of the towns I see which have half decent IPs have high levels of unemployment, and what looks like very little chance of Capital Growth in the next couple of years.
I know that everyone will say, purchase +ve cashflow properties. But you must admit that you need to scope the town to make sure that there is a demand for housing in the area which will continue for some time to come…
How would you suggest getting more info about townships with decent IPs? I can find plenty of houses at +ve cashflow levels, but I have only a limited amount of information in which to base these calculations on.
Anyone?
Thanks.
PaulI personally don’t like the idea of investing in rural areas where high unemployment and a high turnover of tenants is common.
However most of these rural areas do show more +ive cashflow properties but at the cost of minimal/nil capital growth.
You have to remember that tenants will typically rent a particular property because they work in the area – i believe that cities are always the best areas for this.
I’m sure that there are areas that show both a decent yield and good growth but finding them can prove difficult, especially in the current market. It’s like trying to pick the next hot suburb by ripple effect.I guess you have to ask yourself what is the main reason you are investing for – yield or capital growth?
Someone who is nearing retirement would typically prefer a high yield as they are after income and cannot capitalise any capital gains in the future if they are dead!
Conversely if you are younger, location is much more important with the higher possibility of capital gains.
I personally prefer the latter and invest in inner city areas which have a lot of infrastructure and proximity to public transport, shops etc. This minimises vacancy rates and also ensures good growth. Capital growth is also the basis of wealth creation and should be the main purpose.
As they say, 80% of something is better than 100% of nothing.Hi Tom,
Theres a big difference in people’s definition of rural towns. Would you classify Albury-Wodonga, or Wagga Wagga a township? They are in fact cities offering great investment opportunities. Other rural cities in Victoria that I would look into are Wangaratta, Shepparton, Ballarat etc. My advice would be to steer well clear of ‘townships’ with population of less than 20k. There’s much greater risk of buying into a ‘stale’ are with limited opportunity for growth.
Well, that’s my opinion anyway!
Andrew.Tom Jones,
Cant agree with you more on your comments.
Point of interest, Kalgoorlie is a hot spot at the moment.
Rental vacancies are below 2.5%.
On average, median house prices have risen 6% in the past six months. With the Gold price as steady as it has been, projections are for property prices to push up around the 10% mark between now and the end of the year!Stretch
There are those that LET it happen, and there are those that MAKE it happen!!
There are town ships and regional areas that are on par with capital growth,you just have to know if there is any potential ? in the not too distant future.
:What ever you are seeking is seeking you!
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